The life insurance industry has been abuzz with improving the customer experience for the past few years, particularly in the new business and underwriting processes. It might seem like a tired topic to revisit in 2018, but the number of carriers that have yet to (fully) implement capabilities such as end-to-end electronic application, end-to-end eSignature, straight-through policy issuance, and eDelivery of policy, just to name a few, indicates otherwise. What is behind the low adoption rates for such capabilities? And more importantly, what can be done to drive higher adoption?
Current Applicant Experience
The current life insurance applicant is likely to be a Gen X or Millennial – and will soon be a Post-Millennial. Her buying experience leaves her frustrated and dissatisfied. As she does whenever she is faced with any new purchase, she starts on the internet. She quickly finds a website that offers life insurance quotes. This is where her experience first starts to deviate from her expectations. Instead of providing a quote, the website facilitates a phone call with an agent. Disappointed, the applicant provides her phone number and indicates a convenient call time. The agent calls and offers to visit her at her house and walk her through everything. The applicant is a bit taken aback. She wasn’t expecting to have to work with someone to get a life insurance quote, let alone invite that person into her home, or go to his or her office. In her view of the world, this is not how things get done.
When the agent arrives at her home, he starts by asking her to fill out an insurance “Needs Assessment” questionnaire that is seven pages long. It all looks simple and straight-forward, yet, as she begins filling it out, she notices that the questions become progressively more intrusive. It starts with demographic information, such as her name, address, and occupation. That is followed by detailed questions about her monthly budget, including all her income and all her expenses broken down by category. Finally, it rounds out the assessment by asking about assets, liabilities, financial goals, and expectations for final expenses, debts and income replacement. Using the collected information, the agent prepares a few proposals, walks the applicant through them while answering her questions along the way. He also gives her a 41-page packet containing the insurance application and several associated forms. He asks the applicant to review the proposals and to fill out the application packet based on the plan she likes. He offers to return in a few days to take care of signatures and payment and to collect the paperwork for submission to the carrier.
Her experience continues in this manner, inclusive of documentation follow-ups, family medical histories of which she knows little, a visit from a nurse, and it culminates with the agent telling her that the 41-page application packet is ready for evaluation and that she’ll hear something in the next 90 days or so. To the applicant, the 21st century this is not.
The Next-Gen Experience
These sentiments held by the biggest pool of potential life insurance buyers are well known in the life insurance industry; it’s not a surprise to anyone.
It’s equally well known that what these applicants desire instead is an experience that flows like this:
- 24/7 self-service on devices of their choosing with a seamless transition from one (e.g., mobile app) to another (e.g., desktop web browser);
- interactive questionnaires presenting a few questions at a time and tailored based on answers already provided;
- being asked the breadth of information needed during the application process (not as follow-ups during the evaluation process);
- comparison of products, coverages, premiums, etc.;
- review of the final application packet before signing it;
- electronic signature;
- electronic payment at the time of signature;
- an immediate decision, with an explanation in cases when the application requires further evaluation, followed by regular notification of its status; and
- electronically delivered documents, including the issued policy.
When both the source of frustration and the pathway to delight are known, why the low adoption rate on capabilities that matter most to this newest generation of consumers? The short answer is that while there is a simple to understand and implement technology solution for each element of the desired experience, delivering the complete experience requires assembling simple technology building blocks into a sophisticated and well-engineered solution. That might sound simple, but it is not easy and is what bedevils the industry.
The technology components that need to be assembled consist of the following:
- A modern user interface development framework that supports web, tablet and mobile access.
- A reflexive question engine that can determine what questions to ask based on answers already provided.
- It requires codification of all application evaluation rules, including New Business, Compliance and Underwriting
- A document generation system to present electronically completed application packets for review.
- eSignature and ePayment
- A system integration platform that facilitates:
- Real-time communication with information sources, e.g., MIB, Rx history, MVR, etc.
- Real-time appointment scheduling with evidence providers, e.g., paramedical exam, labs, tele-interview, etc.
- An underwriting rules engine, to codify underwriting rules, and provide real-time risk assessment with stratification by statistical confidence intervals.
- ePolicy and eDelivery
- Policyholder portal for receiving application status, viewing the issued policy and securely communicating with the agent and the insurer.
- Agent portal to view the status of submitted applications, and securely communicate with applicants and the insurer.
The following diagram illustrates a logical assembly of the necessary technology components into a conceptual future state for a typical life insurer:
Such a conceptual solution might seem daunting. Fortunately, the software architecture discipline provides a proven approach for accomplishing all of the above and more, which is to conceptualize the target state, acknowledge the current state, identify gaps between the two, outline a roadmap for closing the gaps, and then chip away at the solution one capability at a time. Care must be taken to ensure that each building block that adds functionality and capability on the back-end also enhances the front-end experience of next-generation customers. Given proper prioritization of resources and budgets, all of this can be accomplished in two to three years.
Think big, start small, and move fast is the call of the hour. It’s not rocket science, but it does take considerable focus and persistence – something the industry has been demanding of its applicants for decades.n
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